Thomas B. Fargo, President and CEO, Hawaii Superferry
On April 25, Hawaii Superferry named retired U.S. Navy Adm. Thomas Fargo as head of the interisland passenger and vehicle transporter. With a controversial few months that included protests, an extended drydock period and seasick passengers, Fargo looks at the current status and future of the company.
Photo by Olivier Koning
Q: I read that your skill sets and experience are going to help tremendously with the Hawaii Superferry. Could you explain?
A: The Superferry is entering what I would call a new phase of expanded operations, and my experience in the Navy for 35 years was running complex maritime operations. Clearly, making sure that ships run on time, understanding the maintenance aspects of ships and then just providing typical leadership and management skills that you learn in the Navy, I would hope would be very helpful to the company and complement what they already have. In addition, when I retired from the Navy three years ago, I worked for a company called Trex Enterprises Corp. and served as their president. It’s a great company, and their business model was they’re a high-tech company that does contract research and development for the government. But they’re also an incubator and they have developed six subsidiaries, startups if you will, from those technologies that were developed within Trex Enterprises. So I’ve got three years experience with new companies and how they become successful.
Q: Aloha Airlines just closed. How does that affect the Superferry’s business plan?
A: We built a business plan that assumed that there would be two operating airlines here, so that’s not a large adjustment. I think the Aloha situation did make people aware that a lot of the transportation options here in Hawaii are somewhat fragile. We’re in a little different niche than either the airlines or Young Bros. We’re about moving people and cars, people and kayaks, and people and their coolers and their families.
Q: With Kauai, you’re trying to reach out to them to return service there. How do you hope to get them back?
A: I think the very best way to move forward with everybody here in Hawaii is to demonstrate reliable and responsible service. And that’s what we’re doing right now. I think at the point of this interview [May 14], we’ve been running daily to Maui for some 40 days in a row, and now to two-a-day voyages. … We’re not only going to provide a reliable operation, we’re going to show people that these inspections that we do to make sure that vehicles are clean and are complying with the spirit and the intent of the rules are being followed with great diligence.
Q: On the reliability issue, I know during the winter there were some problems. How do you hope to address those problems next winter?
A: We’ve learned a lot from that shakedown period. We recognize that there are tough days out there, especially in the Molokai Channel. But there’s no reason that the Superferry can’t operate 12 months of the year. We’ll adjust our processes and procedures and we’ll also make sure we do a pretty good job of letting people know what the conditions at sea are. Once again, I would reiterate that the ship can operate 12 months of the year. It’s designed to do that.
Q: In the latest promotion, you raised the fares a little but waived the fuel surcharge. With the high price of oil, why would you have this promotion?
A: As you point out, we are about to raise the fare modestly to $49 on the 5th of June. I think this is pretty typical of any new enterprise. Obviously, you’re going to have introductory and promotional fares that allow people to understand the capability and the opportunity. Over the long run, we think because of the efficiency of moving people at sea that we’ll be able to keep the fares at pretty modest levels.
Q: You said, to reach out to Kauai, that reliability would be the biggest thing. Is there anything else?
A: We’re very sensitive. Each island is different and has a different set of issues. We continue to talk to people on Kauai as well as we’re talking to folks on the Big Island so we understand their concerns and ultimately we’d like to do what’s right for each community.
Q: When do you think this enterprise will turn a profit?
A: The profitability, of course, is going to be based on a balance of passengers and cars and commercial traffic with drivers interisland. I think we’re very pleased with the way this is ramping up. I’m not going to put a number or a date on profitability, but right now [passengers] are going to sea on the Superferry in ever increasing numbers.
Q: Do you see a lot more passenger or commercial [traffic], or both?
A: I think it’s going to be a blend. You’ve seen the Love’s Bakery trucks and the FedEx trucks. When you go down to the pier, you see a lot of small business trucks that are moving back and forth because it’s pretty convenient. You can load everything into the back of your Ford or Nissan truck and move it readily and be ready to work on arrival. I think you’ll see the small businesses will find this both efficient and cost-effective, and that will play a significant role in the profitability of the company also.
Do you like what you read? Subscribe to Hawaii Business Magazine »